The Fifth International Conference on Entrepreneurship and Business Management

(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

i
 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

PREFACE

The International Conference on Entrepreneurship and Business Management (ICEBM) is a conference that
aims to facilitate the exchange of best practices information and knowledge dissemination in the field of
entrepreneurship, business, and management. The ICEBM is organized by Tarumanagara University and
collaborating universities as well as related institutions. The conference provides the forum for various
groups of professionals including practitioners, researchers, academicians, practitioners, government
officials, individuals in society, and graduate/ postgraduate students.

Following the success of the Fourth ICEBM that was held in Bangkok, this year the Fifth ICEBM is held in
Tainan in collaboration with Kun Shan University, Ciputra University, Udayana University, Kristen Krida
Wacana University and Trisakti School of Management. The main theme of the Fifth ICEBM is
“Entrepreneurship and Management in Turbulent Global Environment: From Start-Up to Global Business”.

The turbulent global environmental forces are constantly presenting new opportunities and threats.
Entrepreneurs and managers are increasingly taking a global view of the company’s market opportunities
and competitions. Mark Zuckerberg, Founder of Facebook, embraced change, created new solutions to
unmet needs and managed to shape the incredible rocket growth from start-up to global giant. A primary
feature of the conference is to consider the dynamics of entrepreneurship and management in the context of
globalization. This posits challenges toward professionals and entrepreneurs in finding ways to vitalize the
business development in the turbulent global environment.

In this Fifth ICEBM 2016, there were 126 abstracts received from the participants and 84 full papers were
reviewed by ICEBM Scientific Committee. This committee comprises of 46 reviewers from 13 different
institutions and 7 countries. The 84 full papers were received from 45 different institusions that came from 9
different countries: Brazil, China, Ethiopia, India, Indonesia, Malaysia, Philippines, Sweden, and Taiwan. A
total of 75 out of 84 papers have been accepted. Reviewing process in this year is similar to last year where
we applied a double blind peer-review process and scientific committee reviewed not just the abstracts
received but also the full papers. These papers address diverse areas of application in entrepreneurship and
business management. Starting from the field of accounting and finance, economics, marketing, and so forth
through addressing a wide variety of theoretical and methodological approach.

This year papers that have been published to the book of proceedings will be further evaluated for possible
submission to the special issue of Asia Pacific Management Review (APMR) and ASEAN Marketing
Journal (AMJ). We hope that this book of proceedings could promote and stimulate further the discussion of
practitioners and academics especially on business challenges and threats in turbulent global environment.

Finally, we would also like to thank all the contributing authors for their valuable work in supporting the
success of the Fifth ICEBM. Thank you very much for your contribution.

Conference Chair

Dr Keni
Prof. Chin-Chiuan Lin

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 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

OPENING SPEECH FROM THE RECTOR OF TARUMANAGARA UNIVERSITY

Distinguished guests, ladies and gentlemen:

I am pleased to have the opportunity of addressing this important conference, widely known as the
International Conference on Entrepreneurship and Business Management (ICEBM for short). After its first
successful arrangement in Jakarta, followed by Bali, Penang, and Bangkok, this year’s conference in Tainan,
Taiwan, commemorates the fifth anniversary of the event, and I am immensely grateful for having found to
date the Conference a continued success.

The purpose of the seminar actually is to provide a forum that facilitates the exchange of knowledge and
experience of both practitioners and academics in entrepreneurship, business, and management. Here they
can mutually share their findings. I would like to further remind all of us about the importance of the current
Seminar, considering the chosen topic “Entrepreneurship and Management in Turbulent Global
Environment: from Start-Up to Global Business.” Basically the term start-up is still quite debated. The US
Small Business Administration describes start-up as a “business that is typically technology oriented and has
high growth potential.” It is considered that the only essential aspect of start-up is growth! Because of this
“growth potential,” a start-up is able to provide its goods and services to a wider or larger market. As this
happens, a start-up has no other choice but explores an unknown area or uses an innovative business model,
trying to disrupt existing markets. This enables a start-up to enter a global business. From start-up to global
business; one can imagine how difficult or turbulent is when a start-up involves globally or cross-border
transactions of resources between two or many nations. For this reason, this Seminar actually is not just
important but is even necessary in particular for those who try to understand and anticipate any possible
threats and opportunities, which come along with the rapid change in the global environment.

Distinguished guests, ladies, and gentlemen:

I would like to conclude with the following notes. Firstly, while we organize the event co-hosting with Kun
Shan University, this year’s conference becomes special for the support of 4 other universities: Universitas
Udayana, Universitas Kristen Krida Wacana, Ciputra University, and Trisakti School of Management
(TSM). They provide assistance in the preparation and execution, leading this event to a success. I am
thankful for their kind contribution. Secondly, our thanks also go to Kun Shan University for its utmost
support and wonderful cooperation. I sincerely thank the Faculty of Economics of Tarumanagara University,
in particular the organizing committee for their hard-work and dedication, making this important conference
successfully possible. Finally, I would like to express my gratitude for the presence of distinguished speakers
and a number of active participants from several countries. I wish you all a productive and fruitful seminar.
Thank you.

Prof. Dr. Agustinus Purna Irawan

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 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

OPENING SPEECH FROM THE PRESIDENT OF KUN SHAN UNIVERSITY

First of all, it is an honor and a pleasure to hold the International Conference on Entrepreneurship and
Business Management (The Fifth ICEBM 2016). I and staff of Kun Shan University to interact with all of
you distinguished scholars and business elites at this marvelous conference.

In 2016, the government of R.O.C. (Taiwan) proposed a ”new southward policy” not only to revive the
foundation of the“go south”policy, but also to build new social and educational ties. Specifically, the policy
focusing on strengthening relations between Taiwan and South and Southeast Asian nations would be set up.
The policy would not be confined to trade and investment but would also include people-to-people, cultural,
educational, research and other types of exchanges. This policy shows commitment to make Taiwan more
ASEAN-oriented. Clearly, more business knowledge and understanding of South and Southeast Asian
countries is necessary to Taiwanese researchers and business men/women. Therefore, it is an honor to host
the Conference working together with the excellent partners of Universities in ASEAN. I look forward the
Conference would become the best forum to share ASEAN-related knowledge. After the Conference, I
sincerely hope that KSU will build a best academic and Business partners with the Tarumanagara University
(UNTAR).

Finally, I highly recommend that please take the break to explore this amazing city of Tainan. Enjoy the
Conference and take advantage of the opportunities it offers.

Prof. Yan-Kuin Su

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 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

SPEAKERS

Mr. Steven Hsu

(The CEO of TXA (Tronxin Accelerator Limited) and Founder of
TXA Private Board of Directors)

Prof. Chaidir Anwar Makarim

(Tarumanagara University, Indonesia)

Ir. Dr. Rajendran Muthuveloo

(Univesiti Sains Malaysia, Malaysia)

Dr. Teoh Ai Ping

(Universiti Sains Malaysia, Malaysia)

Mr. Tony Antonio

(Ciputra University, Indonesia)

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 The Fifth International Conference on Entrepreneurship and Business Management
SCIENTIFIC COMMITTEE
Prof. Vesa Routamaa
Prof. Benjamin Yuan
Prof. Felix T. Mavondo
Prof. Silvio Cardinali
Associate Prof. Tomoki Fujii
Chong Chee Leong, Ph.D.
Prof. Chen Cheng-Nan, Ph.D.
Associate Prof. Lu Te-Tsai
Prof. Ya-Chin Wang
Yen-Hui Ouyang
Dr. Tzu-Chuan, Kao
Che-Fei Chen
Dr. Shuo-Pei Chen
Dr. Chieh-Chung Chan
Dr. Po-Hsu Ko
Dr. Jer-Min Tsai
Dr. Shu-Ching Huang
Dr. Feng-Cheng Tung
Dr. Li-Yueh Lee
Dr. Wen-Jin Hwang
Dr. Ming-Hsein Kang
Ir. Dr. Rajendran Muthuveloo
Dr. Teoh Ai Ping
Prof. Tresna P. Soemardi
Avanti Fontana, Ph.D.
Dr. Yono Reksoprodjo
Prof. Dr. Ni Wayan Sri Suprapti
Dr. Luh Gede Sri Artini
Dr. Christina Whidya Utami
Dr. Wirawan Endro Dwi Radianto
Dr. Trianggoro Wiradinata
Dr. Christian Herdinata
Prof. Carunia M. Firdausy
Dr. Sawidji Widoatmodjo
Dr. Indra Widjaja
Dr. Ignatius Roni Setiawan
Dr. Rina Adi Kristianti
Arnold Japutra, Ph.D.
Dr. Keni
Dr. Miharni Tjokrosaputro
Dr. Hetty Karunia Tunjungsari
Dr. Chairy
Dr. Agus Zainul Arifin
Dr. Ishak Ramli
Dr. Lerbin Aritonang
Dr. Vita Briliana
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9
University of Vaasa, Finland
National Chiao Tung University, Taiwan
Monash University, Australia
Universita Politecnica delle Marche, Italy
School of Economics, Singapore Management University,
Singapore
SIM University, Singapore
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Kun Shan University, Taiwan
Universiti Sains Malaysia, Malaysia
Universiti Sains Malaysia, Malaysia
University of Indonesia, Indonesia
University of Indonesia, Indonesia
University of Indonesia, Indonesia
Udayana University, Indonesia
Udayana University, Indonesia
Ciputra University, Indonesia
Ciputra University, Indonesia
Ciputra University, Indonesia
Ciputra University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Tarumanagara University, Indonesia
Trisakti School of Management, Indonesia
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 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

ADVISORY BOARD

Patron : Rector of Tarumanagara University

Board of Advisor : 1. Vice Rector of Academic

2. Dean of Faculty of Economics
3. Director of Tarumanagara Center for
Entrepreneurial Studies
4. Dr. Indra Widjaja
5. Lina, Ph.D.
6. Jap Tji Beng, Ph.D.
7. Arnold Japutra, Ph.D.

Committee Director : Dr. Sawidji Widoatmodjo

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ORGANIZING COMMITTEE
Tarumanagara University
Chair
Secretary
Treasurer
Sponsorship Administration
Program
Logistics
Design
Publication and Documentation
Kun Shan University
President
Vice President/ Dean of International
and Cross-Strait Affairs
Vice President/ Secretary General
Conference Chair/ Dean
Program Chair/ Chair Prof.
International Coordinator/ Vice Dean
Local Coordinator/ Director
International Liaisons
Local Liaisons/ Chair of Department :
Web Master
Committee Members
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9
: Dr. Keni
: 1. Sofia Prima Dewi
2. Joyce Angelique Turangan
: 1. Franky Slamet
2. Merry Susanti
: 1. Herlina Budiono
2. Dr. Miharni Tjokrosaputro
: 1. Paula Tjatoerwidya Anggarina
2. Didi Widya Utama
: 1. Mei Ie
2. Yugih Setyanto
: Anny Valentina
: 1. Agus Budi Dharmawan
2. Ary Satria Pamungkas
3. AR. Johnsen F.
: Prof. Yan-Kuin Su
: Prof. Tien-Shang Lee
: Prof. Kuo-Shien Huang
: Prof. Chin-Chiuan Lin
: Prof. Cheng-Nan Chen
: Prof. Ya-Chin Wang
: Dr. Te-Tsai Lu
: 1. Dr. Shieunt-Han Tsai
2. Yueh-Feng Chuang
3. Winnie Ting
4. Prof. Shu-Mei Chen
1. Dr. Shu-Mei Lin
2. Dr. Ho Ou Yang
3. Dr. Chan-Yau Chen
4. Prof. Ya-Chin Wang
5. Dr. Yao-Kai Chuang
: 1. Dr. Jer-Min Tsai
2. Dr. Shieunt-Han Tsai
: 1. Dr. Linda Lin
2. Dr. Li-Yueh Lee
3. Dr. Bi-Fen Chang
4. Dr. Yi-Chang Chen
5. Dr. Cheng-Lung Li
6. Prof. Wen-Ruey Lee
7. Dr. Kua-Ping Liao
8. Kung-Huei Huang
9. Yen-Hui Ouyang
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 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

TABLE OF CONTENT

PREFACE ......................................................................................................................................................................... ii
OPENING SPEECH FROM THE RECTOR OF TARUMANAGARA UNIVERSITY .......................................... iii
OPENING SPEECH FROM THE PRESIDENT OF KUN SHAN UNIVERSITY ................................................... iv
SPEAKERS ....................................................................................................................................................................... v
SCIENTIFIC COMMITTEE ......................................................................................................................................... vi
ADVISORY BOARD...................................................................................................................................................... vii
ORGANIZING COMMITTEE .................................................................................................................................... viii
TABLE OF CONTENT .................................................................................................................................................. ix
INFORMAL SECTOR IN INDONESIA: THE SIGNIFICANT ROLE OF THE LOWER CLASS
ENTREPRENEURS IN INDONESIA ECONOMY ...................................................................................................... 1
Chaidir Anwar Makarim ................................................................................................................................................................... 1
THE N-FACTORS FOR STRATEGIC ENTREPRENEURSHIP ............................................................................... 6
Rajendran Muthuveloo, Ai Ping Teoh ............................................................................................................................................... 6
ARE BUSINESSES INTELLIGENT ENOUGH TO ENDURE VOLATILITY AND THRIVE ON
COMPETITION?A CONCEPTUAL FRAMEWORK ON THE ROLES OF BUSINESS
INTELLIGENCE USE, STRATEGIC AGILITY AND ORGANIZATIONAL PERFORMANCE ....................... 10
Ai Ping Teoh, Rajendran Muthuveloo ............................................................................................................................................. 10
AN ANALYSIS OF INNOVATION STRATEGIES OF TAIWANESE CONVENIENCE CHAIN
STORES .......................................................................................................................................................................... 15
Tain-Fung Wu, Hsiao-Ching Yang,Thuy Thi Thanh Nguyen ......................................................................................................... 15
THE RELATIONSHIP BETWEEN PRODUCT ATTRIBUTES, PRODUCT INVOLVEMENT,
WORD-OF-MOUTH, AND PURCHASE INTENTION OF MEDICAL EQUIPMENT-COMPARING
TAIWANESE AND MAINLAND CHINESE MARKETS ......................................................................................... 20
Wan-I Lee, Yu-Ta Shih, Shan-Yin Cheng....................................................................................................................................... 20
KNOWLEDGE MANAGEMENT AND VALUE CREATION FOR TAIWAN CHILDREN’S
CLOTHING INDUSTRY: A QUALITATIVE CASE STUDY .................................................................................. 24
Cheng-Lung Li, Hsiu-Chen Tsai ..................................................................................................................................................... 24
STRATEGIC MANAGEMENT AND HIGHER EDUCATIONAL INSTITUTIONS - A CASE STUDY
BY USING BSC CONCEPT .......................................................................................................................................... 32
Cheng-Lung Li, Chih-Wei Liu ........................................................................................................................................................ 32
AN EXPLORING STUDY OF APPS DOWNLOAD INTENTIONS ........................................................................ 39
Avus CY. Hou, Rong-An Shang ..................................................................................................................................................... 39
EFFECT OF EQUATOR PRINCIPLES ADOPTION ON BANK LIQUIDITY ..................................................... 44
Naiwei Chen, Hsiu-Hsi Huang, Chia-He Lin .................................................................................................................................. 44
VECTOR ERROR CORRECTION MODELLING FOR FDI CAUSALITY IN TAIWAN................................... 49
Shailender Singh,Gajendra Singh .................................................................................................................................................... 49
EXPLORING THE IMPACT OF RESILIENCE ON THE FEMALE CAREER DEVELOPMENT
AND ENTREPRENEURIAL INTENTIONS: THE CASE OF REAL ESTATE INDUSTRY KUN
SHAN UNIVERSITY TAIWAN, R.O.C....................................................................................................................... 55
Cheng-Lung Li, Min-Chi Chung ..................................................................................................................................................... 55
FACTORS RELATED TO THE INTENTION OF STARTING A NEW BUSINESS IN EL
SALVADOR .................................................................................................................................................................... 60
Linda Lin, Ana Vanessa Peña, Cheng-Nan Chen ........................................................................................................................... 60

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 The Fifth International Conference on Entrepreneurship and Business Management
(ICEBM 2016)
Tainan, Taiwan – November 17-18, 2016
ISBN : 978-979-9234-59-9

ENTREPRENEURSHIP EDUCATION IN THE CONTEXT OF TECHNOLOGY

COMMERCIALIZATION – A CASE FROM TAIWAN ........................................................................................... 68
Tommy Shih , Yen-Yu Huang......................................................................................................................................................... 68
WHAT KIND OF SOCIEATAL CONTEXT IS ENTREPRENEURSHIP EDUCATION EMBEDDED
WITHIN? ........................................................................................................................................................................ 74
Yen Yu Huang, Tsung Ying Shih.................................................................................................................................................... 74
ENTREPRENEURSHIP AND COMMUNITY DEVELOPMENT- A COMPETENCY
PERSPECTIVE STUDY ................................................................................................................................................ 79
Yi-Chang Chen, Han-Ming Lin, Xiu-Man Ye................................................................................................................................. 79
FACTORS RELATED TO THE INTENTION OF STARTING A NEW BUSINESS IN EL
GUATEMALA ................................................................................................................................................................ 83
Linda Lin, Sergio Jose Acajabon Lantan, Cheng-Nan Chen ........................................................................................................... 83
A STUDY ON THE LONG-TERM CARE POLICY IN TAIWAN ........................................................................... 90
Hsieh Ming-cheng, Hsuen Sung-lin, Hsieh Ming-jui ...................................................................................................................... 90
CAN DARK TRIAD MEDIATE ENTREPRENEURIAL ATTITUDE ORIENTATION TOWARD
ENTREPRENEURIAL INTENTION? ........................................................................................................................ 95
Alaleh Dadvari, Ben-Roy Do .......................................................................................................................................................... 95
PERCEPTION OF PARENTS AS STAKEHOLDERS ON TRIMESTRAL SYSTEM AT DE LA
SALLE LIPA................................................................................................................................................................. 101
Lanie M. Santos ............................................................................................................................................................................ 101
TESTING THE EFFECTS OF WORKPLACE SPIRITUALITY AND ORGANIZATIONAL
CITIZENSHIP BEHAVIOR ON ORGANIZATIONAL HEALTH ........................................................................ 106
Wilfreda D. Dimaano, DBA .......................................................................................................................................................... 106
CONSUMER BEHAVIOUR IN THE PURCHASE OF ENVIRONMENTALLY FRIENDLY
HERBAL PRODUCTS IN DENPASAR CITY .......................................................................................................... 111
I Gusti Ayu Ketut Giantari, Ni Nyoman Kerti Yasa, Ni Wayan Ekawati, I Putu Yudi Setiawan, Gede Bayu Rahanatha............. 111
THE ROLE OF BLUE OCEAN STRATEGY IN MEDIATING INDUSTRIAL COMPETITION TO
COMPETITIVE ADVANTAGE ................................................................................................................................. 117
I Gusti Ayu Dewi Adnyani, Ni Nyoman Kerti Yasa, Putu Gde Sukaatmadja ............................................................................. 117
THE IMPACT OF BUDGETING PROCESS IN THE PERFORMANCE OF MICRO, SMALL AND
MEDIUM ENTERPRISES IN LIPACITY ................................................................................................................ 124
Lani R. Garachico, Ma. Margaret Garachico-Marasigan ............................................................................................................... 124
THE EFFECT OF SERVANT LEADERSHIP ON JOB SATISFACTION AND ORGANIZATIONAL
CITIZENSHIP BEHAVIOR: A CASE STUDY AT A PRIVATE SCHOOL IN INDONESIA ............................ 129
I Dewa Nyoman Sudarta, Desak Ketut Sintaasih, Agoes Ganesha Rahyuda ................................................................................. 129
CREDIT RISK MANAGEMENT OF DE LA SALLE SCHOOLS IN LUZON ..................................................... 136
Maria Delia Miraña Poot, MMT ................................................................................................................................................... 136
THE EFFECTS OF SELF ESTEEM AND MORTALITY SALIENCE ON ATTITUDE AND PRICE
OF COUNTERFEIT PRODUCTS, TERROR MANAGEMENT THEORY APPLICATION ............................. 141
Putu Saroyini Piartrini ................................................................................................................................................................... 141
PSYCHOLOGICAL EMPOWERMENT AND ORGANIZATIONAL COMMITMENT: THE
EFFECT ON PERFORMANCE OF RURAL COMMUNITY CREDIT UNION IN BADUNG
REGENCY, BALI PROVINCE .................................................................................................................................. 145
Desak Ketut Sintaasih, I Gusti Ayu Manuati Dewi, I Wayan Mudiartha Utama, Ni Wayan Mujiati, Ayu Desi
Indrawati ....................................................................................................................................................................................... 145
THE SURVIVAL AND GROWTH OF A NEWLY-ESTABLISHED MICRO, SMALL-SIZED
FAMILY FIRM: A DYNAMIC PROCESS PERSPECTIVE................................................................................... 153
Achmad Sobirin ............................................................................................................................................................................ 153
DID LOCAL ENTREPRENEUR BECOMES LESS IN VILLAGE PRAWIROTAMAN? .................................. 158
Elisabet Dita Septiari, Dhyah Ayu Retno Widyastuti, Nino Ardhiansyah ..................................................................................... 158
THE EFFECT OF MACRO ECONOMIC VARIABLES AND SOUTHEAST ASIA STOCK PRICE
INDEX TO INDONESIAN STOCK PRICE COMPOSITE INDEX ....................................................................... 163
Luh Gede Sri Artini,Nyoman Tri Aryati, PutuVivi Lestari ........................................................................................................... 163

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ISBN : 978-979-9234-59-9

THE MODERATING EFFECT OF ORGANIZATIONAL CULTURE IN THE INFLUENCE OF

DISCIPLINE AND INCENTIVES TOWARD EMPLOYEES PERFORMANCE WHICH MEDIATED
BY MOTIVATION ....................................................................................................................................................... 167
Saparso, Rudolf Lumbantobing ..................................................................................................................................................... 167
DOES THE AGENCY COST MEDIATE THE INFLUENCE OF DETERMINANTS OF CAPITAL
STRUCTURE ON THE CORPORATE DEBT RATIO? ......................................................................................... 174
Rudolf Lumbantobing ................................................................................................................................................................... 174
INDONESIA PINEAPPLE SUPPLY CHAIN MANAGEMENT AND THE IMPROVEMENT OF
GLOBAL MARKET AND COMPETITIVENESS ................................................................................................... 180
Faurani Santi Singagerda, Abshor Marantika ................................................................................................................................ 180
A CRITICAL REVIEW OF SOME FACTORS TO AFFECT THE ADOPTION OF MANAGEMENT
ACCOUNTING TECHNIQUES ON MANUFACTURING INDUSTRIES ........................................................... 188
Ardiansyah Rasyid, Elizabeth Sugiarto D, Wilson Kosasih .......................................................................................................... 188
BRAND TRUST: ITS ANTECEDENTS AND OUTCOMESON COMMITMENT TO THE BRAND ............... 193
Vita Briliana .................................................................................................................................................................................. 193
TRASFORMATION KNOWLEDGE AND SKILLS RELATED TO THE ESTABLISHMENT OF
QUALITY CULTURE AND EFFECT ON PRODUCTS QUALITY ...................................................................... 200
Ayi Tejaningrum ........................................................................................................................................................................... 200
STRATEGIC SERVICE QUALITY IN FACING GLOBAL ENVIRONMENT: BENGKULU,
INDONESIA EVIDENCE ............................................................................................................................................ 206
John Tampil Purba, Kamaludin ..................................................................................................................................................... 206
DETERMINANT OF FUNDAMENTAL MICRO ECONOMIC ON THE ORGANIZATIONAL
PERFORMANCE OF THE RETAIL COMPANY LISTED IN INDONESIA STOCK EXCHANGE ................ 213
Tita Deitiana, Niken Purbasari ...................................................................................................................................................... 213
EFFECT OF COMPENSATI ON AND WORK DISCIPLINE ON EMPLOYEE PRODUCTIVITY ................. 218
Rr.W.Rachmawati ......................................................................................................................................................................... 218
EFFICIENCY ANALYSIS OF OPERATIONAL PERFORMANCE USING OPERATING
EFFICIENCY RATIO (OER) IN INDONESIA STATE-OWNED BANKS ........................................................... 223
Hanifah .......................................................................................................................................................................................... 223
WOMEN EMPOWERMENT MODEL THROUGH OPTIMIZING SOLID WASTE MANAGEMENT
IN MALANG................................................................................................................................................................. 228
Sri Budi Cantika Yuli, Nazaruddin Malik, Muhammad Sri Wahyudi Suliswanto ........................................................................ 228
STRATEGIES IN ORDER TO INCREASE FOOD SECURITY SYSTEMS IN EAST JAVA ............................ 233
Sudarti, Eris Tri Kurniawati .......................................................................................................................................................... 233
IMPLEMENTING DEVELOPMENT STRATEGY OF TOURISM PRODUCTS IN BALI: FROM
CULTURAL TO WELLNESS TOURISM ................................................................................................................ 237
Ni Wayan Sri Suprapti, I Komang Gde Bendesa, Putu Yudi Setiawan ......................................................................................... 237
MANAGERIAL BEHAVIOR PERSPECTIVE ON AGENCY FEES AND IMPLICATIONS ON
DIVIDEND POLICY .................................................................................................................................................... 242
Tita Deitiana, Stella Sumantri ....................................................................................................................................................... 242
FACTORS INFLUENCING THE QUALITY CULTURE ....................................................................................... 248
Lena Ellitan, Teodora Winda Mulia .............................................................................................................................................. 248
SUSTAINABILITY COLLABORATION MODEL FOR DEVELOPMENT OF DIGITAL
CREATIVE INDUSTRY IN CENTRAL JAVA ........................................................................................................ 252
Mutamimah, Suryani Alifah, Mustafa ........................................................................................................................................... 252
INNOVATIVENESS OF BATIK SMES AND MARKET ORIENTATION: A CONCEPTUAL
MODEL ......................................................................................................................................................................... 257
Rahab, Nurul Anwar, Darmanto Sahat Setyawan .......................................................................................................................... 257
BUILD LEGAL BASIS CONTROL MODEL TRADITIONAL MARKETS IN CONDITIONS
MODERN MARKET ................................................................................................................................................... 262
Retno Mawarini Sukmariningsih, Agus Nurudin, Rahab .............................................................................................................. 262
EXPLORING ANTECEDENTS AND CONSEQUENCE OF INDONESIAN MUSLIM YOUTHS'
ATTITUDE TOWARDS HALAL COSMETICS PRODUCT ................................................................................. 265
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Vita Briliana, Nurwanti ................................................................................................................................................................. 265

THE IMPLEMENTATION OF INVESTMENT MODEL TO INCREASE HOTEL’S CUSTOMERS
COMMITMENT IN JAKARTA ................................................................................................................................. 272
Keni, Ary Satria Pamungkas ......................................................................................................................................................... 272
THEORY OF PLANNED BEHAVIOR IN ENTREPRENEURSHIP EDUCATION: THE PRACTICE,
THE FLAWS, THE FUTURE ..................................................................................................................................... 279
Azura Omar, Ainon Jauhariah Abu Samah, Suhaimi Mhd Sarif ................................................................................................... 279
LIQUIDITY CHARACTERISTICS OF GOVERNMENT BOND MARKETS: A COMPARATIVE
STUDY ........................................................................................................................................................................... 287
Sugeng Wahyudi, Rio Dhani Laksana, Hersugondo, Hardjum Muharam, Robiyanto ................................................................... 287
MEANING OF CAREER AND WELL BEING THE KEY OF CAREER PERFORMANCE STUDY
OF THE CONCEPT OF A CAREER PERFORMANCE ........................................................................................ 292
Sumaryono, Suryana Sumantri, Diana Harding, Marina Sulastiana .............................................................................................. 292
CORPORATE FRAUD AND VALUE OF FIRM: EMPIRICAL EVIDENCE FROM INDONESIA
CAPITAL MARKET ................................................................................................................................................... 297
Hermeindito, J.E.Sutanto............................................................................................................................................................... 297
FREE CASH FLOW AND EARNINGS MANAGEMENT: BOARD OF COMMISSIONER, BOARD
INDEPENDENCE AND AUDIT QUALITY AS MODERATING .......................................................................... 302
Yulius Kurnia Susanto, Arya Pradipta, Indra Arifin Djashan ........................................................................................................ 302
INFORMATION SYSTEMS ADOPTION AMONG SMES IN SURABAYA GREATER AREA ....................... 307
Trianggoro Wiradinata, Tony Antonio .......................................................................................................................................... 307
THE PERSPECTIVE OF ETHICS IN THE CONSCIOUS MIND OF ACCOUNTING STUDENTS ................ 315
Deasy Ariyanti Rahayuningsih ...................................................................................................................................................... 315
ON THE IMPACT OF MARKET ORIENTATION TOWARDS MARKETING PERFORMANCE
WITH ENTREPRENEURIAL MARKETING AS INTERVENING AT THE FOOTWEAR
INDUSTRY IN EAST JAVA INDONESIA................................................................................................................ 320
J.E.Sutanto, Musriha ..................................................................................................................................................................... 320
ENTREPRENEURSHIP ECOSYSTEM BASICS AND INSIGHTS FROM INDIAN AUTO
COMPONENT MANUFACTURING SECTOR ....................................................................................................... 325
Premkumar Balaraman, Kalpana Kosalram, Sungkrityayan Khan, Arvind Balakrishnan ............................................................. 325
MOTIVATIONAL POSTURES, KNOWLEDGE, AND PEER REPORTING BEHAVIOR TO TAX
COMPLIANCE DECISSION: EXPERIMENTAL STUDIES ON STUDENT ENTREPRENEURS .................. 333
Elen Puspitasari,Yeye Susilowati .................................................................................................................................................. 333
THE INFLUENCE OF SIZE, BUSINESS RISK, WORKING CAPITAL TURNOVER, AND
PROFITABILITY TO CAPITAL STRUCTURE LISTED IN INDONESIAN STOCK EXCHANGE
2012 - 2014 ..................................................................................................................................................................... 341
Yeye Susilowati, Elen Puspitasari ................................................................................................................................................. 341
THE DEVELOPMENT OF MICRO, SMALL AND MEDIUM ENTERPRISES (SMES), AND
COOPERATIVE BASED FOOD COMMODITIES IN EAST JAVA, INDONESIA ............................................ 345
Wiyono, Zainal Arifin ................................................................................................................................................................... 345
THE INFLUENCE OF SELF EFFICACY AND LOCUS OF CONTROL TO PERFORMANCE
MEDIATED BY PROFESSIONAL COMMITMENT ............................................................................................. 350
Basukiyanto, Mohammad Fauzan, Inawati, Kis Indriyaningrum .................................................................................................. 350
THE INFLUENCE OF INTELLECTUAL CAPITAL TO ORGANIZATIONAL COMMITMENT
WITH TEACHER EFFICACY AS MEDIATING VARIABLE .............................................................................. 357
Mohammad Fauzan, Basukiyanto, Agustinus Suyatmo, Kis Indriyaningrum ............................................................................... 357
THE EFFECT OF AUDIT COMMITTEE AND QUALITY OF AUDITORS ON EARNINGS
MANAGEMENT (STUDIES ON SOME MANUFACTURING COMPANIES OF CONSUMER
GOODS, LISTED IN THE INDONESIA STOCK EXCHANGE 2012-2014)......................................................... 364
Michelle Kristian ........................................................................................................................................................................... 364
EXPLORING HIGHER RADICALITY OF PRODUCT INNOVATIONS AND HIGHER
FLEXIBILITY AND HIGHER AGILITY OF MANUFACTURING SYSTEM: HOW THE AGILITY
AND FLEXIBILITY AFFECT RESULTS?............................................................................................................... 369
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Selma Regina Martins Oliveira ..................................................................................................................................................... 369

AN EXPLORATORY STUDY OF BUSINESS EXIT PERCEPTIONS AMONG SME OWNERS IN
EAST JAVA-INDONESIA .......................................................................................................................................... 375
Mohammad Iqbal, Umar Nimran, Ari Irawan ............................................................................................................................... 375
DOES ISO LABELLING MATTER IN CONSUMER’S CHOICE? ...................................................................... 382
I Gede Mahatma Yuda Mahatma Bakti, Harryadin Mahardika, Arnold Japutra, Sri Rahayu Hijrahhati ....................................... 382
LOCAL WISDOM FOR GREENPRENEURSHIP AS A SOLUTION TO BATIK INDUSTRY IN
INDONESIA.................................................................................................................................................................. 389
Juliuska Sahertian, Denprahanto A. Krisprimandoyo, Tina Melinda, Fabio Ricardo Toreh ......................................................... 389
DETERMINANTS OF FINANCIAL RISK ATTITUDE AMONG THE HANDLOOM MICRO-
ENTREPRENEURS IN NORTH EAST INDIA ........................................................................................................ 396
Kishor Goswami, Kalpana Handique, Bhabesh Hazarika ............................................................................................................. 396
ANTECEDENTS AND CONSEQUENCES OF PERCEIVED DECEPTION:A STUDY OF GLOBAL
LUXURY SKIN CARE BRANDS IN INDONESIA .................................................................................................. 401
Evi Rinawati Simanjuntak, Irwin Saputra ..................................................................................................................................... 401
THE EFFECT OF LEADERSHIP STYLE TOWARDS CORPORATE CULTURE AND THE
IMPLEMENTATION OF GREEN MANAGEMENT AND ITS IMPACT ON COMPANY
PERFORMANCE ......................................................................................................................................................... 406
Kusdi Raharjo, Destiana, Arik Prasetya ........................................................................................................................................ 406
THE IMPACT OF TACIT KNOWLEDGE MANAGEMENT ON ORGANIZATIONAL
PERFORMANCE ......................................................................................................................................................... 413
Narendran Shanmugam, Rajendran Muthuveloo ........................................................................................................................... 413
THE FACTORS AFFECTING BALANCE SHEET TO CAPITAL STRUCTURE DURING
FINANCIAL CRISIS 2008-2011 (THE CASE ON COMPANIES IN ASEAN COUNTRIES) ............................. 419
Hendro Lukman ............................................................................................................................................................................ 419
THE ANTECEDENTS OF THE PASSENGER SATISFACTION: THE ROLE OF RAILQUAL ...................... 426
Kenji Bisma Wibawa Junardy, Sri Rahayu Hijrah Hati, Arnold Japutra, Harryadin Mahardika, Andreina Fara .......................... 426
THE IMPACT COUNTRY IMAGE AND SUBJECTIVE KNOWLEDGE ON CONSUMER
ATTITUDES AND BEHAVIORS: COMPARISON OF KOREAN AND JAPANESE RESTAURANTS .......... 430
Alwin Adityo, Sri Rahayu Hijrah Hati, Arnold Japutra, Harryadin Mahardika............................................................................. 430
THE EFFECT OF ADVERSITY INTELLIGENCE, SOCIAL RELATIONS AND RISK TAKING
PROPENSITY TOWARDS ENTREPRENEURSHIP INTENTION OF STUDENTS OF FACULTY
OF ECONOMICS AND BUSINESS (FEB) AT UNIVERSITAS MUHAMMADIYAH
PURWOKERTO (UMP), INDONESIA ..................................................................................................................... 436
Hermin Endratno, Purnadi ............................................................................................................................................................. 436
THE EFFECTS OF SERVICE QUALITY, PRICE AND PROMOTION ON CUSTOMERS’
PURCHASE DECISION OF TRAVELOKA ONLINE AIRLINE TICKETS IN JAKARTA,
INDONESIA.................................................................................................................................................................. 442
Rani Idawati, Carunia Mulya Firdausy .......................................................................................................................................... 442

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ISBN : 978-979-9234-59-9

DOES ISO LABELLING MATTER IN CONSUMER’S CHOICE?

I Gede Mahatma Yuda Mahatma Bakti1), Harryadin Mahardika2), Arnold Japutra3), Sri Rahayu Hijrahhati4)
1)
Indonesian Institute of Science, Banten, Indonesia
2) 4)
Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia
3)
Faculty of Economics and Business, Universitas Tarumanagara, Jakarta, Indonesia
2)
harryadin.mahardika@ui.ac.id

Abstract

This paper aims to examine the effect of ISO labelling on consumers’ attitudes with brand familiarity and product
involvement as the moderating factors. We performed two experimental studies. The experiment was designed in a 2
(ISO 9001 label: presence vs absence) x 2 (brand familiarity: familiar vs. unfamiliar) between-subject design.
Participants of study 1 was 155 undergraduate students. The experiment design of study 2 adopted a 2 (ISO 9001 label:
presence vs absence) x 2 (product involvement: high vs low) between-subjects experiment. Participants of study 2 was
266 undergraduate students. The findings showed that the effect of ISO 9001 labelling on consumers’ attitudes (i.e.
product quality and purchase intention) depends on brand familiarity and product involvement. Finally, theoretical and
managerial implication of this study was discussed.

Keywords: Product Labelling, ISO 9001, Product Quality, Brand Familiarity, Product Involvement

Introduction
Before making any decision to purchase a product, consumers tend to consider several important cues. One of the
key cue in purchase decision is product quality (Chapman and Wahlers, 1999). Product quality provide signal to
consumers’ mind, in which it may consist processing product’s security, safety, health, convenience, locality, ethical
factors, etc. (Wandel & Bugge, 1997; Corcoran et al., 2001; Harrington, 1994; Issanchou, 1996; Bernues et al. 2003).
Despite quality is an important cue, consumers do not always have capability to evaluate quality product, either before
or after consuming it (Caswell, 2006).
Consumer behavior literature explained that to obtain a quality product, consumers may refer to product cues, either
to intrinsic and extrinsic cues (Olson and Jacoby, 1972). According to signaling theory, consumers are more likely to
consider extrinsic than intrinsic cues in product evaluation (Spence, 1974). It is since consumers and sellers have
asymmetric information in market interactions (Boulding and Kirmani, 1993). In other words, sellers have known
quality of their products, while consumers have not known it. Whereas, in product evaluation, consumers need
information that allows them to distinguish between a high and low quality product (Boulding and Kirmani, 1993).
Consequently, before consumers purchase a product, they will consider quality signal of the product. The quality signal
is usually in the form of cues (Boulding and Kirmani, 1993). A typical extrinsic cue is industry label, one of them is
International Standards Organization (ISO) label. Among various ISO label, one of the most relevant for marketers who
play ‘quality game’ is ISO 9001.
ISO 9001 is the most popular international standard that was implemented by many organizations/companies in
various countries, specifically to show the ability of the organization to perform quality management system in
producing their products (Lee et al., 2009). The coverage of ISO 9001 is very extensive, covering many product
categories. Even so, ISO 9001 is a voluntary standard, not an obligatory standard (Sampaio et al., 2009). As ISO 9001
requires organization/company to continuously deliver a product that meet customer, statutory and regulatory
requirements (ISO, 2008). Further, ISO 9001 is a generic standard that can be implemented to large and small; private
and public; industrial, commercial and service organizations (To et al., 2011). For ISO 9001 certified organizations,
they are permitted to communicate this achievement to their stakeholders. Further, they can enclose the ISO 9001 label
on product, packaging, or any form advertising, etc. Today ISO 9001 label become one of the trusted symbol for
product quality that has been widely accepted by consumers.
In the existing literature, the adoption of ISO 9001 labelling in products has been subject of interesting discussion.
Does ISO 9001 labelling matter in consumers’ purchase decision? Results from various studies provide a mix evident.
Several studies support the notion that quality assurance labelling influence consumers’ attitude (e.g. Walley et al.,
1999; Fotopoulos and Krystallis, 2003). Nair and Prajogo (2009) suggested that ISO 9001 certification positively
reflects on quality image. Likewise, Verbeke et al. (2012) contend that a product with quality standard label is believed
to deliver superior quality signal, and also indicates different character of the product (considered as a distinctive
product). Further, Carpenter and Larceneaux (2008) also agreed that quality standard label provides a positive
relationship with product quality and purchase intention. On the other hand, other studies found that quality standard
label, including ISO 9001, does not influence consumers’ perception during product evaluation (e.g. Verbeke, 2005;

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Grunert and Wills, 2007). According to Maggat and Viscusi (1992), the presence of quality standard label is not
considered as an important factor for consumers, when they have a variety of information (Dimara and Skuras, 2005).
Thøgersen (2002) also suggested that the presence of label may be unsuccessful to influence consumers’ perception,
since they have other relevant information from various sources (Larceneux et al., 2012).
Based on aforementioned discussion, a better explanation on the effects of ISO labeling toward consumers’ mental
judgment is still largely needed. There are various areas that should be clarified, including the efficacy of ISO labelling
in relation to purchase situation, pricing strategy, brand familiarity, product involvement, etc. Using this rationale in
mind, this study aims to examine the moderating effects of brand familiarity and product involvement when ISO label is
presented. Brand familiarity and product involvement play a key role in explaining whether consumers’ estimation
toward product quality with or without ISO label. The results could help marketers to identify the interplay between
their product characteristic and ISO label.

Literature Review
The main idea of this study is based on signaling theory (Spence, 1974). In product evaluation, extrinsic cues are
more considered by consumers rather than intrinsic cues (Spence, 1974). Extrinsic cues are the cues related to product
attributes, in which the amendment will not impact on physical nature of the product. Otherwise, intrinsic cues are the
product attributes that cannot be manipulated without changing the physical nature of the product. (Richardson et al.
1994). According to Spence (1974), the main reason why extrinsic cues are important is because asymmetric
information often occurred between consumers and sellers in market interactions (Boulding and Kirmani, 1993). The
gap emerges when sellers make an effort to signal the quality of their products, while consumers are making inaccurate
interpretation on the given signal. Consumers should beable to make an accurate interpretation on the information to
allow them to distinguish between a high and a low quality product (Boulding and Kirmani, 1993). In this sense, when
consumers are not fully able to process information about product quality, consumers will turn to extrinsic cues to make
a product evaluation. It is since extrinsic cues of the product are easily obtained by consumers. In most of the situation,
extrinsic cues will be able to provide a signal to determine product quality (Boulding and Kirmani, 1993). Putting it into
perspective, one type of the extrinsic cues is ISO 9001 label.
The effects of ISO 9001 labelling on consumers’ decision making can be explained by information processing
theory. The theory explained that consumers’ preference is highly dependent on the context and the individual
characteristics. Further, prior knowledge is one of the important factors that build consumers’ preference (Ha-
Brookshire and Yoon, 2012). Given this evident, prior knowledge is believed to facilitate the acquisition of new and
existing information (Rao and Monroe, 1988).
According to Rao and Monroe (1988), prior knowledge is defined as “the amount of accurate information held in
memory about product alternative as well as buyers’ self-perceptions of this product knowledge (i.e., what they believe
they know)”. Based on the definition, it can be explained that prior knowledge has two dimensions, i.e. familiarity and
expertise (Alba and Hutchinson, 1987). Familiarity is “the number of product-related experiences accumulated by a
consumer”, and expertise is “the ability to perform product related tasks successfully” (Rao and Monroe, 1988).
Further, impact of familiarity on consumers’ attitude in product evaluation has been studied by many researchers (Rao
and Monroe, 1988; Cambell and Keller, 2003; Lim and Olshavsky, 1988; DeCarlo et al., 2007; Hardesty et al., 2002).
Referring to familiarity perspective, consumers prefer to use ISO label when other product attributes are considered as
unfamiliar attributes to them. On the other hand, consumers are less likely to use ISO 9001 label, when they are already
familiar with the product attributes (Rao and Monroe, 1988).

Hypotheses
Considering the importance of familiarity and ISO labelling on consumer’s product evaluation, this study proposes
the following conceptual framework to understand the relationships between each of the variables:

Table 1. Conceptual Framework

Moderating Variables: Involvement Familiarity

(Low x High) Unfamiliar Brand
µ1
ISO 9001 Labelling
DV1: Product Quality
DV2: Purchase Intention
Label
µ3
No Label
DV1: Product Quality
DV2: Purchase Intention
Familiar Brand
µ2
DV1: Product Quality
DV2: Purchase Intention
µ4
DV1: Product Quality
DV2: Purchase Intention

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One of the familiar attributes that is mostly considered by consumer is brand (Kent and Allen, 1994). Campbell and
Keller (2003) stated that brand familiarity is an important concept that may influence consumer buying process. Further,
brand familiarity describe the structure of brand knowledge, i.e. brand associations in the consumers’ memory
(Campbell and Keller, 2003). Based on the aforementioned explanation, this study hypothesize:
H1 : In the case of unfamiliar brand, the effect of ISO 9001 labelling on consumers’ attitudes, i.e. quality
product (H1a) and purchase intention (H1b), is greater than in the case of familiar brand.

Despite the effect of ISO 9001 labelling in the case of unfamiliar brand is greater than familiar brand. The authors
also suspected that when two brands are similar in unfamiliar condition, consumers still have a different perception on
ISO 9001 labelling. The authors considered that the differences of perception occurs because of consumers’ evaluation
toward product involvement. Further, involvement was defined as “an individual, internal state of arousal with intensity,
direction, and persistence properties” (Andrews et al., 1990). By using the framework of elaboration likelihood model
(ELM), Petty et al. (1983) explained that consumers tend to apply peripheral or central route to evaluate product based
on its level of involvement. The central route “requires a person's cognitive elaboration of the advertising message”,
while the peripheral route occurs “in the absence of cognitive elaboration for those persuasive arguments” (Torres and
Briggs, 2007). In relation to product labeling, ELM contend that when consumers are in a high involvement in product
evaluation, they tend to consider the presence of ISO 9001 label. On the other hand, consumers tend to less consider the
importance of ISO 9001 label when they are in a low involvement situation. Therefore, this study hypothesize:
H2 : When two brands are identical and consumers are not familiar with them, the effects of ISO 9001
labelling toward consumers’ attitudes i.e. quality product (H2a) and purchase intention (H2b) is greater
for low involvement product than high involvement product.

Experiment

Study 1
Overview. Study 1 aims to examine the effects of brand familiarity in determining the influence of ISO 9001
labelling toward consumers’ attitudes, both on product quality and purchase intention. To achieve this objective, the
experiment was designed in a 2 (ISO 9001 label: presence vs absence) x 2 (brand familiarity: familiar vs. unfamiliar)
between-subject design. The manipulation development for the experiment was referring to the guidelines from Leclerc
et al. (1994), which are calculator and detergent. A total of 155 undergraduate students (61% female) have been
voluntarily joined as participant for this study.
Stimuli. Based on Kent and Allen (1994) study, the stimuli for study 1 was created in the form of print ads. The print
ads contain images, brand, ISO 9001 labelling and promotional sentences. The manipulations were conducted by
delivering a familiar (vs. unfamiliar) real brand and the presence (vs the absence) of ISO 9001 label.
Procedure. The participants in each experimental group was selected with randomly assignment. In the experimental
testing, the participants was guided by instructors to ensure all process of the experiment could be performed accurately
by participants. The real objective of this study was not informed in the beginning of the assignment (before
manipulation). The real objective was informed, after the participants have finished the assignment (debriefing). During
the experiment testing, the instructors informed the general objective of this study, i.e. the survey is about marketing
communication, and the participants were asked to response to the questionnaire based on their knowledge. Thereafter,
the participants were tasked to evaluate the ads, both on detergent and calculator. During the evaluation of the ads,
participants were instructed to follow the guideline given by the instructor.
Measurement. The dependent variable of study 1 was product quality and purchase intention. Prior studies found
that these variables are latent variables, i.e. the variable cannot be measured directly, but it must use several
measurement indicators (Diamantopoulus et al., 2012). In this study, product quality was operationalized as perceived
quality, not objective quality. Given this arrangement, the measurement of product quality were using Srivastava and
Mitra’s (1998) guideline, i.e. overall impression of the product, product quality, and product performance. Meanwhile,
the measurement of purchase intention adopted three items from Zhang and Zinkhan (2006), i.e. likely, probable, and
possible to buying a product.
Results. The test on the main effect of ISO 9001 labelling (M ISO9001= 5.08 , Mno-ISO9001= 4.49; F (1,155) = 16.68,
p<0.05), and brand familiarity (Mfamiliar= 5.47 , Munfamiliar= 4.07; F (1,155)= 101.59, p< 0.05) on perceived quality of
calculator are significant. Consistent findings also shown on purchase intention, in which the main effect of ISO 9001
labelling (MISO9001= 4.83 , Mno-ISO9001= 4.15; F (1,155) = 15.84 , p< 0.05), and brand familiarity (Mfamiliar= 5.18,
Munfamiliar=3.76; F (1,155)= 75.28 , p< 0.05) are significant.
This study found significant interaction effect between ISO 9001 labelling and brand familiarity on perceived
quality of calculator (F (1,155) = 4.82 , p< 0.05). However, the authors found no evident of interaction effect between
ISO 9001 labelling and brand familiarity on intention to buy a calculator (F (1,155) = 1.87 , p> 0.10). Therefore, using
calculator as a context, H1a was supported and H1b was rejected.

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Furthermore, the test provide evident for a significant interaction effects between ISO 9001 labelling and brand
familiarity on perceived quality of detergent (F (1,155) = 3.45 , p< 0.10). Specifically, when the brand of detergent are
in unfamiliar condition, the presence of label has a higher perceived quality than the absence of label (MISO9001= 4.398 ,
Mno-ISO9001= 3.675 ; t = 3.314, p< 0.05). Meanwhile, when the brand of detergent are in familiar condition, the presence
of label does not increase perceived quality (MISO9001= 5.162 , Mno-ISO9001= 4.966 ; t = 1.083, p> 0.10). Based on the
aforementioned results of detergent testing, H1a and H1b was supported.

Study 2

Overview. It is interesting to see whether the effects of ISO 9001 labelling on consumers’ attitudes will be
significant for unfamiliar brand. Following the results from Study 1, the authors proposed that when the brands are in
unfamiliar condition, consumers should have differences of perception on ISO 9001 labelling.
Stimuli& Procedure. Following the guideline from Study 1, stimuli for Study 2 was conducted in the form of print
advertisement (Kent and Allen, 1994). The print advertisement show unfamiliar brands for electronics products with
high (vs. low) involvement. In addition, presence (vs. the absence) of ISO 9001 label was also added into the print
advertisement. The experiment procedure in Study 2 was similar to Study 1.
Measurement. Measurement items for dependent variables (product quality and purchase intention) were using the
guidelines from Study 1. For manipulation check, the measurement of product involvement adopted the items from
Zhang and Zinkhan (2006), i.e. the degree of attention, the level of concentration, the level of thought, and the level of
effort. In addition, the manipulation of ISO 9001 labelling was checked with similar items from Study 1.
Result. The result also showed the main effect of ISO 9001 labelling (MISO9001= 4.12, Mno-ISO9001= 3.47; F (1,266) =
20.15, p< 0.05), and product involvement (Mtinggi= 3.48, Mrendah= 4.10; F (1,266) = 18.07, p< 0.05) on perceived quality
is significant.

On the other hand, the authors also found a significant interaction effect between ISO 9001 labelling and product
involvement on purchase intention (F (1,266) = 8.89, p < 0.05). Specifically, the result showed since the unfamiliar
brands are in the low involvement, the presence of ISO 9001 label have a higher purchase intention than the absence of
ISO 9001 label (MISO9001= 4.156, Mno-ISO9001= 3.099; t = 4.822, p < 0.05). Meanwhile, since the unfamiliar
brands are in the high involvement group, the presence of ISO 9001 label does not increase purchase intention
(MISO9001= 3.246, Mno-ISO9001= 3.099; t = 0.690, p > 0.10). Based on the result of second testing, H2a and H2b
was also supported.

Discussion
The findings of this study provide an empirical support that in the case of unfamiliar brand, the effect of ISO 9001
labelling on product quality and purchase intention are greater than familiar brand. This result is supports prior studies,
such as Maggat and Viscusi (1992), Thøgersen (2000) and Johnson and Russo (1984). Further, Johnson and Russo
(1984) explained that familiarity refers to a superior knowledge toward a targeted product., in which it may decrease
one’s the effort to search for alternative. Relevant to this study, brand familiarity generates subjects’ tendency to ignore
additional information, such as ISO 9001 label. Furthermore, this study provides a solid ground to extend the
information process theory, in which subjects were showing tendency to prefer to use ISO 9001 label in the case of
unfamiliar brand. However, the authors found that the effects of ISO 9001 labelling on subject’ attitudes toward the
brand were not always significant for all products, for example intention to buy a calculator (see the result of study 1).
This implies that the type of product plays an important role in determining the effects of ISO 9001 labelling on
consumers’ attitudes the targeted brand.
Interestingly, the results show that although the brand is unfamiliar, in the low product involvement, the effects of
ISO 9001 labelling on product quality and purchase intention is greater than the high involvement product. Align with
this results, the authors support that elaboration likelihood model (ELM) theory can be implemented in product
labelling, including ISO 9001 label. On the other words, ISO 9001 label may influence consumers’ purchase judgment
if consumers choose to use peripheral route. Whereas, when they use central route, ISO 9001 label may induce no
effects in consumers purchase judgments.
The findings of this study provide some important ground for managerial implications. In particular, it provides a
basis for crafting marketing communication plan based around the using of ISO 9001 label. Managers should consider
the moderating factors that influence the relationship between ISO 9001 labelling and consumers’ attitudes in product
evaluation. These factors determine when ISO 9001 label is useful to support marketing communication. In this case,
the moderating factors are brand familiarity and product involvement.
In this regard, managers must consider whether the brand is widely known by market or not. Managers may conduct
surveys on their brand awareness and brand associations (see Aaker, 1996) or take the survey from external agencies, to

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determine whether ISO 9001 label should be used in the marketing communication of the targeted brand. When
consumers have a high brand awareness and strong brand association, ISO 9001 labelling should not be prioritized in
marketing communication strategy. ISO 9001 labelling could be prioritized when consumers have a low brand
awareness and a weak brand association.
In addition, manager should consider whether the type of the products has a high or low product involvement. When
the product is low involvement, it may be of the best interest of manager to use ISO 9001 label in marketing
communication. Conversely, managers should not use ISO 9001 label, when the product is high involvement.

Conclusion
Two experiments were conducted to test the effects of ISO 9001 labelling on consumers’ attitudes. Specifically, this
study employed brand familiarity and product involvement as moderating effects on the causal relationship between
ISO 9001 labelling and consumers’ attitudes. This study aims to contribute to fill the gap in the existing literature, in
which ISO 9001 labelling may induce different effects on consumers’ judgments. This study found that brand
familiarity and product involvement moderates the effects of ISO 9001 labelling on consumers’ attitudes in product
evaluation.
Similar to other studies of this nature, this study is not without limitations. First, the participants were only restricted
to the university undergraduate students, with age range between 17-23 years old. Consequently, this study may not be
able to be generalized into different context and purchase setting. Further research should replicate this study in various
conditions to check the consistency of its findings. Second, this study only tested two moderating factors, i.e. brand
familiarity and product involvement. Other key factors, such as price, features, etc., may have a more significant effects
toward consumers’ purchase judgments. Related to the information processing theory, the future research can test the
other key factor such as prior knowledge and expertise. Therefore, further research should consider to use other
moderating factors in order to enrich the findings around this area of research.

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